Senators introduce Internet privacy bill

Sens. John Kerry (D-Mass.) and John McCain (R-Az.) introduced an Internet privacy “Bill of Rights” Tuesday that aims to protect sensitive information about users online.

The bill falls short of including key recommendations from the Federal Trade Commission, such as a provision that would stop companies from tracking user activity online. The consumer protection agency suggested a “Do Not Track” mechanism used in browsers that allows consumer block advertisers and marketers from tracking purchases, interaction on social networks and Web site visits.

In a press conference, Kerry and McCain said the bill aims to strike a compromise between businesses who have fought against stringent rules online and consumers who increasingly seek greater protection of their data.

The legislation would require Web sites to clearly explain how they collect data and what they do with it. Those firms would have to offer consumers the ability to opt out of any data collection and would only allow the most sensitive information to be collected by users who opt in to that practice.

The bill seeks to restrict Web sites from collecting information to only that which is “necessary to process or enforce a transaction or deliver a service.” But the bill also leaves wiggle room for data to be used for research and development and says that it can be retained for a “reasonable period of time.”

The bill makes the FTC and state attorneys general the enforcement bodies for the law. But it says both the agency and state AGs can’t work on the same cases at the same time. The legislation would prevent class-action suits.

Amy Mushahwar, an attorney and privacy expert at Reed Smith law firm, said the bill allows room for businesses to regulate their own privacy practices. She said companies have already begun improving privacy policies. Microsoft and Firefox have put Do Not Track technologies into their browsers.

“These serious efforts ought to be provided an opportunity to demonstrate that strong self-regulation is a more sensible and flexible solution than static legislation, particularly in an area where privacy expectations, consumer tastes, commercial needs and technology are rapidly evolving,” Mushahwar said.

Some free market groups point to greater enforcement activity by the FTC over the past year as evidence that investigations, rather than regulations, have effectively protected consumers.

The Obama administration said earlier this month they support legislation that also seeks a balance between Web firms’ concerns that they be allow to use data for more relevant advertising. But they also said there needs to be a law to put safeguards on how that data is collected and to let users know how social networks, mobile services and advertisers user their information.

Kerry said he and McCain didn’t include a Do Not Track requirement because “it didn't't seem to fit in our ability to get a balance for consumer and industry support.”

They noted that Microsoft, Intel and eBay support their legislation.

Consumer advocacy groups said the bill wasn’t strong enough. In a letter to Kerry and McCain, privacy advocates at the Center for Digital Democracy and Consumer Watchdog said the bill still gives companies too much latitude to profile users and track their activity. They said the bill should include the FTC’s Do Not Track proposal.

“Online tracking of consumers as they use the Internet has become pervasive and invasive,” the groups said in their letter. “Consumers have no control over how their information is used, and they are the subject of far-reaching and growing data collection and targeting practices.”

Related stories:

Web firms hiring White House insiders

Google settles privacy case with FTC over Buzz social networking app

Cecilia Kang is a staff writer covering the business of media and entertainment.

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